Injuries and accidents in the workplace can damage a business in a number of ways. Most importantly, they can impact the health and wellbeing of employees. According to the Bureau of Labor Statistics, there were 4,764 fatal workplace accidents and 2.7 million nonfatal accidents in the US in 2020. Many of these workplace accidents will have left workers seriously injured and even permanently disabled.
Secondly, work-related injuries often result in employees taking considerable time off work to recuperate. This can significantly affect the productivity of a business, especially one with a small number of employees or one that’s struggling to survive.
Last but definitely not least, workplace accidents that result in injury can be subject to compensation claims. The more claims a business experiences, the higher their insurance premiums will be. Reducing workplace injuries is therefore not just important for improving employee welfare, it’s also an effective way of lowering costs.
One of the best ways to minimize workers’ compensation claims in the healthcare and hospitality sectors is to introduce comprehensive safety measures and create a culture of safety within an organization. Here, we take a look at some of the most effective ways of achieving this goal.
How Much Does Workers’ Compensation Cost?
Workers’ compensation costs can be divided into two main areas: direct and indirect.
Among the most direct costs businesses face are insurance premiums. Premiums are calculated using a set formula. This formula uses your state, the type of business you run and your total payroll to calculate your annual payments. The more dangerous your insurance company believes your industry is, the higher your premiums will be.
On top of the cost of workers’ compensation insurance premiums, businesses can face other direct costs including medical expenses and costs for legal services. According to the Occupational Safety and Health Administration (OSHA), employers in the US pay almost $1 billion per week for direct workers' compensation costs alone.
Indirect costs associated with worksite accidents could include accident investigation, implementation of corrective measures, lost productivity, repairs to damaged equipment and costs associated with lower employee morale and absenteeism. You may also need to cover the cost of training new hires if injured employees are unable to return to work or need to take an extended period off.
How to Reduce Your Workers’ Compensation Costs
The best way to reduce the amount your business pays out in both direct and indirect workers’ comp costs, is to improve your safety record and implement relevant safety training. After all, the fewer injured employees you have, the more affordable your workers’ compensation policy will be and the less you’ll end up paying out in indirect costs.
The level of workers' compensation premiums you pay can also be reduced if your company employs good safety practices and has a proven history of reducing the risk of injury to employees. Your premiums can also go up if you make a large volume of claims or there are serious safety issues in your workplace.
Create A Culture of Safety
Creating a culture of safety can have a big impact on the number of accidents in the workplace. Putting safety front and center will show employees that their wellbeing is important to your business and encourage all workers to put safety first.
Implement a safety program and create a comprehensive safety policy that can be distributed to all staff. If members of your team regularly work alone, make sure you have a lone worker safety policy in place as well.
Make sure that your employees know how important workplace safety is to your organization. This should help to ensure they don’t take unnecessary risks and help you to create a safe work environment.
Pick the Insurance Policy Which Suits You the Most
Your workers' compensation insurance costs could be higher than they need to be if your policy isn’t right for your business. Insurance companies rate businesses according to the work they do. So, companies that are employed in more dangerous areas (like construction, health care and agriculture) will pay more than those that operate in less hazardous industries.
When taking out a new workers’ comp policy, one of the best ways to minimize your payments is to ensure your business is put in the correct category. Ask your insurance agent to check you’re paying the right rate for your industry.
The number of employees you have will also impact the cost of your premiums. So, if you downsize your workforce, make sure you let your insurer know.
If you live in a state with a competitive insurance market, shop around. You may well find that some providers are significantly cheaper than others.
Educate and Train Your Workers
The best way to reduce the cost of your workers’ comp claims is to prevent accidents from happening in the first place. Introducing workplace safety training can have a big impact on the number of incidents that occur on your premises, so it’s well worth investing in regular staff safety training.
Ideally, all full and part-time employees should undertake regular training sessions to ensure their knowledge stays fresh. Training programs should cover everything from the safe use of equipment to first aid. It should also cover general good practice and make employees aware of any relevant rules and regulations.
OSHA has published a list of recommended practices for safety and health programs. This list can be found on the organization’s website.
Offering a wellness program can help boost employee morale and ensure your staff is as healthy as possible. It can also help to rehabilitate injured workers and contribute to the culture of safety in your workplace. If you don’t have the capabilities to offer a wellness program of your own, talk to a local medical provider to see if they can help.
Implement A Return-to-Work Program
Implementing a return-to-work program can help to get injured employees back at work faster, even if it’s just for light duty. Your work program should encourage staff to come back to the office as soon as their injuries allow. As well as helping to minimize the amount you pay in workers' compensation rates, this will also get your employees earning a paycheck again as quickly as possible.
Your return-to-work program could also help workers to fill out forms relating to their medical care (something that can reduce medical costs and speed up treatment) and give incentives to employees to return to work quickly. Providing this sort of assistance to injured workers can help to foster a positive culture in your business and demonstrate to your staff that you care.
Proper risk management is another effective way of reducing the number of accidents that happen in the workplace. According to the American Society of Safety Professionals, risk management is a formal process for identifying hazards and evaluating and analyzing risks associated with those hazards. Once these hazards have been identified, business owners can take action to eliminate or control them in order to minimize injury and illness.
In many cases, implementing solutions to workplace hazards will help to reduce the cost of workers' comp premiums. This is because insurance companies like to see a proactive approach to workplace safety.
All issues identified during a risk assessment should be included in your company safety policy and solutions should be found to moderate these risks. For example, if your risk assessment highlights an issue with slips and falls, you could install new flooring to make accidents less likely.
Or if your assessment shows lone workers are at a higher risk of injury, you could issue your staff with wireless panic buttons. Having a panic button would allow employees working on their own to instantly and effectively call for help if they have an accident or suffer an injury. This can reduce the time it takes to get assistance and ensure lone workers feel properly protected.
Whether you run a large or small business, reducing workers compensation payments and insurance premiums will be important for your bottom line. Introducing comprehensive safety measures is the best way to protect staff and patients, minimize worker compensation claims, and help to create a safer environment for everyone. Get in touch with a member of our team to find out more.